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November 01, 2009
Social Media | Technology
Bill Geoghegan - Bill@LGTConsulting.com

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© 2009 Hospitality Upgrade. No reproduction without written permission.

To many businesses, Facebook and Twitter represent methods of communicating with youthful audiences, and like many trends, owners and managers are involving themselves in these social networking platforms simply because their competitors are.

But there is tremendous potential value from these new methods of marketing and it represents answers to questions that have developed over recent years.

Facebook was created in 2004 as a social network for Harvard College students, and was limited in its early years to university and high school students only.  On Sept. 26, 2006, it was opened to anyone age 13 or older, and has grown far beyond expectations.  As of Feb. 1, 2009, it reported nearly 45.3 million active U.S. users during the month of January, with over 200 million accounts worldwide. Facebook is growing in every age/gender demographic. The fastest growing segment: Women over 55, up 175 percent in the prior 120 days. Its growth was faster with women than men in almost every age group. Women comprised 56.2 percent of its audience, up from 54.3 percent in late 2008. Of its U.S. audience, 45 percent is now 26 years old or older.

While there are many differences between a Facebook page and a business Web site, you could think of your corporate Facebook page as a mini Web site, but one that is not saddled with the corporate restrictions and technical requirements of a Web page.  Facebook represents an alternative Web site that can be used to post information and offers quickly (and without IT staff) that would take days to include on the corporate Web site.  A highly professional look and feel is not expected, and no special Web skills are necessary to update and maintain the Facebook site.

Compared to Facebook, Twitter is in its infancy.  Begun in early 2006 as an alternative to short messaging service (SMS), it has grown quickly in popularity, with a projected 12 million users by the end of this year.  Twitterers, however, are much more engaged than Facebook users.  Because of its 140 character limit, the Tweets, as they are known, are succinct and read quickly.

Many Twitter followers use third-party services on their BlackBerry® smartphones or iPhone™ to connect to their account.  This makes it easy to quickly check the latest updates from those people or businesses that they follow without ever having to go to a Web page or logging in.

While URLs can be embedded in the Tweet, it is necessary to use short links to keep the message length within the limits.  Third-party services such as TinyUrl.com convert a fully qualified Web page address to a short link address.  For example the direct link to our last Hospitality Upgrade article is www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=365.  Using the TinyUrl conversion, the link becomes available at http://tiny.cc/A5yNB, taking significantly less of the 140 character limit.  By establishing specific landing pages from tiny links, and tracking the traffic through those links,  the effectiveness of Facebook and Twitter links can easily be determined.

Pictures can also be linked from within a Tweet by third-party applications such as twitpic.com.  While not part of Twitter, twitpic is closely interfaced to Twitter such that the Twitter user name and password will work on the twitpic site as well.

Perhaps one of the greatest advantages of marketing through these social networks is that they do not fall under the heading of distribution channels.  Most distribution agreements with Internet booking services such as Expedia, Orbitz, Travelocity, etc. require that their sites be offered the minimum available rate (MAR) that is offered through any other channel, including a resort’s own Web site.  Reducing your rate on any channel requires doing the same for all channels that require a MAR.

However, offers made through Facebook and Twitter fall outside of normal distribution channels, and as such are not subject to MAR agreement.  Lowest published fare contracts would not be breached, since these are not published fares.  Much like offering a coupon to locals, Twitter followers can represent incremental business that will not undercut pricing through existing channels.  Additionally, the cost of marketing to the Friends and Followers is minimal.  The only costs that are incurred are those of the employees whose responsibilities include keeping the Facebook pages current and sending Tweets.

For MGM MIRAGE, Facebook and Twitter represent part of a coordinated Internet marketing campaign. “We wanted to create an easy way for people to connect with Vegas and everything our resorts have to offer,” said Lou Ragg, executive director of Internet marketing for MGM MIRAGE.  “How better than to use today’s technology to give people the information they want, when they want it, in the format they choose?” 

Each MGM MIRAGE resort has its own Facebook page, and most have staff that Tweet regularly, with topics such as night club entertainment information, special restaurant offers, announcement of jackpot winners, and special rates for friends and Twitter followers.  These are coupled with a corporate site (www.yourvegasbeat.com), which has its own Facebook presence (www.facebook.com/YourVegasBeat).  There is a downloadable desktop widget available from thevegasvalet.com, and a Twitter account at Twitter.com/VegasConcierge.

Keeping these sites and services fresh with compelling information and offers is a serious task that becomes part of the marketing department’s responsibilities.  Placing links to Facebook and Twitter pages on a resorts webpage is imperative.  Using e-mail to build friends and followers can give a big boost to the number of potential guests that can be reached through these social media mechanisms.

For the last few years, one of the interesting marketing opportunities that has been just out of reach is location-based services (LBS) for mobile phones.  While almost all phones can receive text messages, and the location of the phone can be determined either via a GPS chip in the phone or via the location of the tower through which the signal is passing, the government has mandated that no messages may be sent to any phone unless the user has specifically opted in to that publisher’s service.  Additionally, anyone attempting to implement LBS messaging would have to develop agreements with multiple cellular service providers, as each nearby phone must be identified, and a message is sent to a phone on a one-to-one basis. Many phone owners are charged up to $.10 for each message received, or the sender can create agreements to pay any fees.  This renders location-based services nearly impossible to use for general marketing. 

Twitter has recently released a set of application program interfaces (APIs), which will allow third-party software developers to integrate the location from which a Tweet is sent with the message itself.  This has enormous potential.  Again, the smartphone owner would have to opt in to the service, but could do so globally rather than to an individual publisher, allowing local businesses to broadcast special offers or updates to everyone who is within a specific geographical area.  Twitter looks at the potential for emergency services to broadcast information in the event of a natural disaster, with Twitter users automatically getting a Tweet on a real time basis. 

Other possible applications include finding friends who might be in the same area at a concert or other event.  The business implications are big.  By building a large number of followers, and having those followers agree to location-based messages, you can create offers that are real time.  Filling a half full restaurant for the early seating with a 2-for-1 offer would be as easy as sending a Tweet with that information.  Any Twitter user could opt in to local offers that would not be limited to those specific accounts that were being followed.   It won’t take long before innovative marketers find ways to take advantage of this new capability.

While many consider Facebook and Twitter to be passing fads, their impact may be as important to low cost marketing as e-mail has been.

Bill Geoghegan is a consultant in Las Vegas. He can be reached for comment at Bill@LGTConsulting.com.

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